EXHIBIT 99.2
MT ISA PHOSPHATES FARM-IN AND JV HEADS OF AGREEMENT
Dated: 7 December 2007
Between: Legend International Holdings, Inc. ARBN 82 120 855 352
of Xxxxx 0, 000 Xx Xxxxx Xxxx, Xxxxxxxxx, XXX 0000
("Legend")
and
King Eagle Resources Pty Limited ABN 26 094 888 687 of
00 Xxxxxxxxx Xxxxx Xxxxxx, Xxxxxxx, XXX 0000 ("King
Eagle")
1. King Eagle is the registered and beneficial owner of EPM 14905
("Quita Creek"), EPM 14906 ("Highland Plains") and EPM 14912
("Lily and Xxxxxxx Creek") (collectively the "Tenements").
2. Legend and King Eagle have agreed to enter into a farm-in and joint
venture arrangement over phosphate minerals on the Tenements.
3. Legend will be required to spend, on exploration or development
activities on the Tenements, $3,000,000 over five years from the date
of this Heads of Agreement to earn an 80% interest in phosphate
minerals on the Tenements.
4. Minimum expenditure by Legend in Year 1 prior to any withdrawal shall
be $200,000.
5. Legend shall have no rights to any minerals on the Tenements other
than phosphate.
6. King Eagle shall retain rights to all minerals on the Tenements,
including uranium, other than phosphate minerals ("Other Minerals").
7. King Eagle has the right to assign its rights to Other Minerals to
third parties.
8. During the period until Legend earns an 80% interest in the phosphate
interests on Tenements, Legend will be responsible for maintaining
the Tenements in good standing.
9. Once Legend has earned its 80% interest in the phosphate minerals on
the Tenements as referred to in clause 3 above, King Eagle's 20%
interest will be free carried until decision to mine.
10. Subject to clause 21, Legend shall have the right, if it has made a
decision to commence a phosphate mining operation, to make
application for mining leases over the resources of phosphate
minerals (including such area required for infrastructure) and the
mining leases will be registered in each party's name according to
their participating interests.
11. King Eagle warrants to Legend at the date of this Heads of Agreement:
(i) that it has the corporate authority to enter into this Heads of
Agreement; and
(ii) the Tenements are unencumbered and not subject to any
royalties.
12. King Eagle gives no warranty that it has met the minimum exploration
commitment for the first year since grant on any of the Tenements.
13. Legend warrants to King Eagle that it has corporate authority to
enter into this Heads of Agreement.
14. For the purpose of this Heads of Agreement, exploration expenditure
shall consist of all costs, charges, expenses and liabilities
incurred in the course of or in connection with Joint Venture
Activities and includes:
(a) Exploration/development costs;
(b) such costs incurred by the participants or any of them with the
prior approval of the operating committee in connection with
joint venture activities;
(c) all other costs, charges and expenses which the participants
agree to regard as expenditure; and
(d) any other amount expressed to be expenditure in this Heads of
Agreement; and
(e) the Manager's fee of 15% calculated on items included within
11 (a) to (d) other than in the case of contacts with a value in
excess of $100,000 where the Manager's fee shall be 5%.
15. Legend shall be the manager of the Joint Venture.
16. Legend shall be solely responsible for programs and budgets on the
Tenements until King Eagle is required to fund its share of
expenditure on the Tenements.
17. King Eagle shall be responsible for all rehabilitation on the
Tenements caused by exploration activities that occurred prior to the
date of this Heads of Agreement.
18. From the date of this Heads of Agreement and until the date of Legend
earning its 80% interest, Legend shall be responsible for
rehabilitation caused by its exploration activitites. From the date
Legend earns its 80% interest in the Tenements, the parties shall be
responsible for rehabilitation caused by exploration for phosphate in
accordance with their participating interests.
19. King Eagle shall be responsible, from the date of this Heads of
Agreement, for all rehabilitation caused by its exploration
activities for Other Minerals on the Tenements.
20. Legend shall be entitled to lodge caveats over the Tenements to
protect its rights under this Heads of Agreement.
21. The Parties to this Heads of Agreement acknowledge that each party
has competing interests for minerals and for that purpose the formal
agreement will be based on the following principles and include
clauses to deal with:
o Each party will provide the other party with a notice of proposed
exploration in sufficient detail to allow the other party to determine
whether that exploration will interfere with its own exploration
program.
o If a party objects to the other party's proposed exploration
program, on the basis that it will interfere with its own
proposed exploration program, the parties will meet in good faith
to determine priorities, such priorities to be determined on the
basis of the value of the target or resource and if agreement
cannot be reached between the parties, the matter is to be
referred to an expert who will decide the priority based upon the
relative value of the targets or resources.
o Each party will provide the other party with a notice of proposed
mining operations in sufficient detail prior to the decision to
mine being made by the first party to allow the other party to
determine whether that mining will interfere with its own
proposed mining program.
o If the parties believe that the mining operation can combine the
mineral interests of both parties, the mining operation will be
developed based on this principle.
o If a party objects to the other party's proposed mining program,
on the basis that it will interfere with its own proposed mining
program and it cannot be developed on a joint mining basis, the
parties will meet in good faith to determine priorities, such
priorities to be determined on the basis of the value of the
resource, and to determine whether sterilisation drilling is
required, and if agreement cannot be reached between the parties,
the matter is to be referred to an expert who will decide the
priority based upon the relative value of the resources.
o Once a decision to mine has been made, no party has the right
to object to the mining operations to be carried out by the
other party.
o Legend shall at its own expense assay for uranium in respect of
all samples taken from the Tenements and must promptly provide to
King Eagle the results of the assays.
o The partes shall cooperate in assaying for minerals of interest
to the other party when requested by the other party and at the
expense of the other party.
o Each party shall provide the other party within 14 days of the
end of each quarter with a written report setting out full
details (including details of assay results) of its exploration
programs.
22. This Heads of Agreement is binding on the parties and it is intended
that this Heads of Agreement will be replaced by a more detailed
formal agreement, to be drafted by Legend within 60 days of the date
of this Heads of Agreement, which shall contain clauses normally
contemplate by a formal agreement including:
o joint venture operating committee
o dilution, including A/(A+B) dilution formula
o manager's authority
o programs and budgets post sole funding period
o default
o disposal and encumbrances
o maintenance of tenements
o bankable feasibility study and mining
o confidentiality
o force majeure
o withdrawal
o mutual pre-emptive rights
o laws of Queensland to apply
23. Both Legend and King Eagle will use their best endeavours to agree
the wording of any announcements or press releases prior to
lodgement. Notwithstanding this, if either party is compelled by law
or listing rules to immediately announce to the market information,
it will advise the other party as soon as possible.
24. King Eagle acknowledges that Legend is a corporation registered in
the USA and may be required to file a copy of this Heads of Agreement
with the SEC in the USA.
SIGNED for and on behalf of
King Eagle Resources Pty Limited
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Signature
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Name
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Title
SIGNED for and on behalf of Legend International Holdings, Inc.
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Signature
X X Xxxxxxx
President and CEO
